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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) STOCKHOLDERS OF RENAISSANCE ) COMMUNICATIONS CORPORATION ) (Transferor) ) ) and ) ) TRIBUNE COMPANY ) (Transferee) ) ) For Transfer of Control of Renaissance ) Communications Corporation, Parent of: ) ) 61 Licensee, Inc., ) Licensee of WTIC-TV, Hartford, CT ) File Nos. BTCCT-960801LG ) Channel 43 Licensee, Inc. ) Licensee of WPMT(TV), York, PA ) BTCCT-960801LH ) Channel 40 Licensee, Inc. ) Licensee of KTXL(TV), Sacramento, CA ) BTCCT-960801LI ) Channel 39 Licensee, Inc. ) Licensee of WDZL(TV), Miami, FL ) BTCCT-960801LJ ) 59 Licensee, Inc. ) Licensee of WXIN(TV), Indianapolis, IN ) BTCCT-960801LK ) 33 Licensee, Inc. ) Licensee of KDAF(TV), Dallas, TX ) BTCCT-960801LL ) and ) ) CHANNEL 43 LICENSEE, INC. ) ) For Modification of Facilities of ) BPCT-960724KK WPMT(TV), York, PA ) ) ) MEMORANDUM OPINION AND ORDER Adopted: March 20, 1997 Released: March 21, 1997 By the Commission: Commissioner Quello concurring in part, dissenting in part and issuing a statement; Commissioner Chong concurring and issuing a statement. Table of Contents Paragraph Introduction 1 Petitions to Deny 3 Multiple Ownership Matters 7 Television Duopoly Rule Waivers 7 Hartford/New York City and Hartford/Cambridge 7 York/Philadelphia 20 Daily Newspaper Cross-Ownership Rule Waiver 31 Procedural Issues 56 Conclusion 58 INTRODUCTION 1. The Commission has before it for consideration the above-captioned applications seeking consent to the transfer of control of Renaissance Communications Corporation (Renaissance) and its subsidiaries from the shareholders of Renaissance to the Tribune Company (Tribune). Renaissance is a publicly traded company, which currently controls the six television stations at issue in the above-captioned applications: WTIC-TV, Channel 61 (Fox), Hartford, Connecticut; WPMT(TV), Channel 43 (Fox), York, Pennsylvania; KTXL(TV), Channel 40 (Fox), Sacramento, California; WDZL(TV), Channel 39 (WB), Miami, Florida; WXIN(TV), Channel 59 (Fox), Indianapolis, Indiana; and KDAF(TV), Channel 33 (WB), Dallas, Texas. Tribune is a diversified publishing, broadcasting and entertainment company, and, pursuant to an Agreement and Plan of Merger dated July 1, 1996, Renaissance will become a wholly-owned subsidiary of Tribune. Currently, Tribune indirectly controls the licensees of ten television stations and five radio stations. 2. Because the Grade B contour of Renaissance's station WTIC-TV, Hartford, Connecticut overlaps with the Grade B contours of Tribune's stations WPIX(TV), New York, New York and WLVI-TV, Cambridge, Massachusetts, Tribune requests a permanent waiver of 47 C.F.R.  73.3555(b), the Commission's television duopoly rule, which generally prohibits the common ownership or control of television stations whose Grade B contours overlap. Tribune seeks a similar permanent duopoly waiver to permit common ownership of WPMT(TV), York, and WPHL-TV, Philadelphia, Pennsylvania, the Grade B contours of which overlap. Tribune also requests a permanent waiver of the daily newspaper cross-ownership rule, 47 C.F.R.  73.3555(d), to permit ownership of WDZL(TV), Miami, notwithstanding that the Grade A contour of that station encompasses the community of Fort Lauderdale, Florida, in which a Tribune subsidiary publishes the Sun-Sentinel newspaper. PETITIONS TO DENY 3. Timely petitions to deny the transfer applications in part were filed by Knight-Ridder, Inc. (Knight-Ridder) and Counterpoint Communications, Inc. (Counterpoint). Knight-Ridder asked the Commission to deny Tribune's request for a permanent waiver of the newspaper cross-ownership rule made in connection with the application for the transfer of WDZL(TV), Miami. Counterpoint petitioned to deny the proposed transfer of control of WTIC-TV, Hartford. Tribune and Renaissance opposed the petitions, and Counterpoint and Knight-Ridder replied. Knight-Ridder's petition to deny will be addressed below in our discussion of Tribune's newspaper cross-ownership waiver request. See infra  40-42. The claims in Counterpoint's petition against the transfer of WTIC-TV regarding the deficiencies in Tribune's duopoly waiver showings will be addressed in our discussion of those showings below. See infra  14-16. Counterpoint's claims concerning Renaissance's allegedly anticompetitive prior conduct, which arguably bear upon Renaissance's qualifications to be a Commission licensee, will be addressed immediately below. 4. In its petition, Counterpoint, the licensee of WTXX(TV) in Waterbury, Connecticut, asserts that Renaissance, the former owner of WTXX(TV), exhibited anticompetitive behavior in its sale of WTXX(TV) to Counterpoint, and that such anticompetitive conduct shows the need for strict enforcement of the duopoly rule and militates against grant of a permanent waiver for the WTIC-TV duopolies. Specifically, Counterpoint states that, when searching for a purchaser for WTXX(TV) in 1992, Renaissance sought a buyer that would offer the least competition to it. At the time the asset purchase agreement for WTXX(TV) was negotiated, Renaissance understood that Counterpoint, a not-for-profit corporation, would not compete against Renaissance for sales because Counterpoint did not intend to sell advertising time on WTXX(TV). The WTXX(TV) asset purchase agreement included a first refusal provision under which Renaissance would be allowed to match any time brokerage offer made to Counterpoint by another party following Counterpoint's acquisition of WTXX(TV), thereby, according to Counterpoint, lessening potential competition to Renaissance. Following its purchase of WTXX(TV), Counterpoint and a third party entered into a time brokerage agreement, the implementation of which Renaissance attempted to enjoin. Although Renaissance's motion seeking an injunction was denied by the court, Counterpoint asserts that Renaissance has continued to pursue its lawsuit to prevent WTXX(TV) from offering programming competitive to Renaissance and WTIC-TV. 5. In its opposition, Renaissance asserts that the facts alleged in Counterpoint's petition pertaining to the sale of WTXX(TV) raise no substantial or material issue as to any misconduct by Renaissance. According to Renaissance, Counterpoint's allegations pertain to "non-FCC misconduct," and are irrelevant to Renaissance's qualifications to be a licensee because there has been no adjudication (or even pending claim) in any forum that Renaissance has engaged in anticompetitive conduct. Renaissance contends that Counterpoint's petition merely shows a breach of contract dispute between Counterpoint and Renaissance. 6. After considering Counterpoint's and Renaissance's pleadings, we conclude that Counterpoint has failed to submit specific allegations of fact showing that grant of the WTIC-TV transfer application would be prima facie inconsistent with the public interest, convenience and necessity. Essentially, Counterpoint's allegations establish that Renaissance has filed suit against Counterpoint in connection with the first refusal provision in the WTXX(TV) asset purchase agreement. The Commission has previously determined that it is not the proper forum for the adjudication of private contractual disputes. See Listeners' Guild, Inc. v. FCC, 813 F.2d 465, 469 (D.C. Cir. 1987) (Commission's denial of petition to deny filed against renewal application upheld as consistent with Commission's longstanding policy of refusing to adjudicate private contract law questions for which state court forum existed). Moreover, Counterpoint has not shown that Renaissance's conduct violated the Communications Act or a specific Commission rule or policy. Counterpoint has also not alleged the existence of any adjudicated violations (or even pending claims) under the antitrust or competition laws against Renaissance. Thus, Counterpoint has failed to demonstrate that Renaissance has engaged in either FCC-related misconduct or non-FCC misconduct that we would deem relevant to Renaissance's qualifications to be a broadcast licensee. For these reasons, we find that Counterpoint's assertions regarding Renaissance's allegedly anticompetitive prior conduct are insufficient to make the required prima facie showing that granting the WTIC-TV transfer application would be contrary to the public interest. MULTIPLE OWNERSHIP MATTERS Television Duopoly Rule Waivers Hartford/New York City and Hartford/Cambridge 7. Tribune's Waiver Requests. WTIC-TV, Channel 61 (Fox), Hartford, Connecticut is located in the Hartford-New Haven Designated Market Area (DMA), the 26th largest in the United States. WPIX(TV), New York, New York and WLVI-TV, Cambridge, Massachusetts are located in the New York and Boston DMAs, the largest and sixth largest DMAs, respectively. Tribune has requested permanent waivers of the duopoly rule to allow common ownership of the stations, contending that an evaluation of its waiver requests under the various factors previously identified by the Commission supports their grant. 8. First, Tribune asserts that there is no Grade A contour overlap, and that the degree of Grade B contour overlap between WTIC-TV and WPIX(TV), and between WTIC-TV and WLVI- TV, is comparable to that present in other duopoly waivers approved by the Commission, particularly those involving the New York and Philadelphia markets. According to Tribune's engineering study, the predicted Grade B overlap between WTIC-TV and WPIX(TV) encompasses 3,185 square kilometers, representing 11.4% and 13.5% of the land area within the WTIC-TV and WPIX(TV) Grade B contours, respectively, and 1,473,000 persons, representing 27.0% and 8.0% of the populations within the Grade B contours of WTIC-TV and WPIX(TV), respectively. The predicted Grade B overlap between WTIC-TV and WLVI-TV encompasses 2,756 square kilometers, representing 9.9% and 17.1% of the land area within the WTIC-TV and WLVI-TV Grade B contours, respectively, and 345,000 people, representing 6.3% and 5.5% of the populations within the Grade B contours of WTIC-TV and WLVI-TV, respectively. 9. Second, Tribune identifies a large number of television stations and other media available to residents of the Hartford, New York and Boston markets generally and to residents of the overlap areas specifically. Excluding WTIC-TV, WPIX(TV) and WLVI-TV, Tribune identifies ten full- power television stations licensed to the Hartford-New Haven DMA, 22 stations licensed to the New York DMA, and 19 licensed to the Boston DMA. According to Tribune, 29 full-service television stations serve some portion of the WTIC/WPIX overlap area with a Grade B or better signal, with eight stations providing service to at least 99% of the overlap area. In addition, 31 full-service television stations serve some portion of the WTIC/WLVI overlap area with a Grade B or better signal, with 11 stations providing service to at least 99% of the overlap area. Tribune asserts that this number of broadcast television stations serving at least a portion of the overlap areas is comparable to other cases in which the Commission has approved permanent duopoly waivers. 10. With regard to other media, Tribune notes that cable penetration is 85.7% in the Hartford-New Haven DMA, 61% in the New York DMA, and 77% in the Boston DMA. Cable penetration is high in the relevant overlap areas, ranging from 71% to 89% in the seven counties comprising the WTIC/WPIX overlap area and ranging from 74% to 87% in the six counties within the WTIC/WLVI overlap area. According to Tribune, the Hartford-New Haven DMA, the New York DMA, and the Boston DMA are, respectively, served by 16, 32 and 25 newspapers with a daily circulation in excess of 10,000. The number of daily newspapers serving the seven counties in the WTIC/WPIX overlap area ranges from seven to 17, while the six counties in the WTIC/WLVI overlap area are served by five to 15 daily newspapers. In addition, approximately 40, 139 and 61 radio stations are licensed to the Hartford, New York and Boston Nielsen Metro Markets, respectively. 11. Third, Tribune asserts that WPIX(TV), WTIC-TV and WLVI-TV serve separate and distinct markets with disparate service needs. New York City, the largest city in the United States, is a national, even international, finance and entertainment center, and the New York DMA has significant African-American (approximately 20%) and Hispanic (approximately 17%) populations. In contrast, Hartford is the largest city and state capital of Connecticut, and Boston is the largest city and "hub" of the New England region. According to Tribune, the Hartford-New Haven and the Boston DMAs also have significantly smaller African-American (approximately 9% and 5%, respectively) and Hispanic (approximately 7% and 4%, respectively) populations. 12. Fourth, Tribune states that common ownership of the three stations will not result in an anticompetitive concentration of economic power and will not threaten diversity in the three markets or in the two overlap areas. WTIC-TV, WPIX(TV) and WLVI-TV are affiliated with either Fox or Warner Brothers, and WTIC-TV and WLVI-TV are UHF stations. According to the May 1996 Nielsen Station Index, none of the stations is dominant in its market, with WTIC-TV, WPIX(TV) and WLVI-TV ranking fourth, third, and tied for fifth, respectively, in the Hartford-New Haven, New York and Boston DMAs. Moreover, according to a 1995 Nielsen county coverage study, WTIC-TV received no recorded viewing in five of the seven counties in the WTIC/WPIX overlap area, and is not carried on any cable system in those five counties. Similarly, in the WTIC/WLVI overlap area, one of the two stations did not receive any recorded viewing in five of the six counties in the overlap area. Tribune also states that WTIC-TV, WPIX(TV) and WLVI-TV will each have its own general manager and will be run autonomously, with separate local news and programming decisions, and none of the stations will engage in joint sales in either of the overlap areas. 13. Fifth, Tribune identifies a number of public interest factors to support its requested waivers. Tribune pledges to expend over $200,000 to open a news bureau in Fairfield County, Connecticut, which lies in the WTIC/WPIX overlap area and which has been underserved with respect to local news programming. Tribune states that it will improve the national news coverage on WTIC-TV by making the resources of its Washington, D.C. Media Center available to WTIC- TV, and by providing WTIC-TV access to Tribune's television news departments in other major cities, including New York, Chicago and Los Angeles. Tribune will also invest in the equipment necessary to permit WTIC-TV to both send and receive news feeds to and from Tribune's various other news resources. Tribune additionally pledges to enhance WTIC-TV's local news facilities, estimating it will invest approximately $500,000, and will explore the possibility of expanding WTIC-TV's local news programming. Finally, Tribune commits to expanding WTIC-TV's children's program, "Fox 61 Kids News," to additional schools in the Hartford-New Haven DMA. 14. Counterpoint's Petition to Deny. Counterpoint argues that the proposed transfer of WTIC-TV is contrary to the public interest and Commission precedent regarding waivers of the television duopoly rule. Counterpoint initially asserts that the WTIC/WPIX and the WTIC/WLVI Grade B overlaps exceed the size of the overlaps permitted in other Commission duopoly decisions, except those involving either the "unique" New York/Philadelphia markets or "compelling" reasons to justify the waiver. With regard to the number of media voices in the overlap area, Counterpoint states that other media, such as newspapers and radio stations, are not direct competitors to television stations and that these other media compete for different advertising dollars. Focusing on the population in the WTIC/WPIX overlap area, and particularly on Fairfield County, Connecticut, one of the counties in the overlap area, Counterpoint also states that WTIC-TV and WPIX(TV) do not serve separate and distinct markets. Counterpoint additionally asserts that the concentration of economic power resulting from Tribune owning three television stations in a small geographic area is contrary to the public interest. 15. In opposing Counterpoint's petition, Tribune refutes Counterpoint's contentions that Commission precedent does not support the requested duopoly waivers. Specifically, Tribune asserts that decisions approving permanent duopoly waivers for the New York and Philadelphia markets support Tribune's waiver requests for other markets. Tribune also contends that there is no basis to Counterpoint's assertion that WTIC-TV and WPIX(TV) serve the same market because these stations are licensed to communities assigned to different DMAs and the communities have different demographics. Counterpoint's emphasis on one county in the WTIC/WPIX overlap area does not, according to Tribune, establish that the two stations serve the same market. Furthermore, Tribune asserts that Counterpoint has provided no support for its suggestion that Tribune will have undue market power in any market if the requested waivers are granted. 16. In its reply to Tribune's opposition, Counterpoint reiterates that the New York and Philadelphia markets are unique, that Commission precedent granting duopoly waivers for those markets are not applicable to the present case, and that no compelling circumstances (such as bankruptcy) exist to otherwise warrant grant of the requested waivers. To refute Tribune's assertion that New York and Hartford are separate and distinct markets, Counterpoint notes that Renaissance's subsidiary 61 Licensee, Inc., the current licensee of WTIC-TV, previously sought and obtained Commission approval, for must-carry purposes, to include within the Hartford-New Haven Area of Dominant Influence (ADI) three communities in Fairfield County, Connecticut, which were assigned to the New York ADI. With regard to Tribune's promise that WTIC-TV, WPIX(TV) and WLVI- TV would be run autonomously with separate local programming decisions, Counterpoint contends that this promise is undermined by Tribune's public interest showing, which cite certain news- gathering and economic benefits to be gained from common ownership. 17. Discussion. The television duopoly rule, 47 C.F.R.  73.3555(b), generally prohibits the common ownership of television stations whose Grade B contours overlap. The objective of the duopoly rule is to promote diversity in programming sources and viewpoints and to prevent an undue concentration of economic power by fostering economic competition in broadcasting. Multiple Ownership Rules, 22 FCC 2d 306, 307 (1970), recon. granted in part, 28 FCC 2d 662 (1971). In adopting the duopoly rule's fixed standard of a prohibited overlap of Grade B service contours, the Commission expressly acknowledged the need for "flexibility" in that rule's application, noting that waivers should be granted where rigid conformance to the rule would be "inappropriate." Multiple Ownership of Standard, FM and Television Broadcast Stations, 45 FCC 1476, 1479 n.12, recon. granted in part, 3 RR 2d 1554 (1964). The Commission has accordingly developed a set of factors to be considered when evaluating an applicant's request for permanent or temporary waivers of the duopoly rule, including the extent of the overlap, the number of media voices available in the overlap area, the distinctiveness of the respective markets, the independence of the stations' operations, and the concentration of economic power resulting from the combination. After weighing these various factors, the Commission considers whether the public interest benefits that would be gained from waiving the duopoly rule outweigh any detrimental effects that would result from the overlap. As with any waiver, it will only be granted if the Commission concludes that the waiver is in the public interest. 18. The Commission is currently reexamining its broadcast television ownership policies, including the duopoly rule. In January 1995, the Commission proposed a new analytical framework within which to evaluate our broadcast television ownership rules. See Review of the Commission's Regulations Governing Television Broadcasting, Further Notice of Proposed Rule Making, 10 FCC Rcd 3524 (1995) (Television Ownership Further Notice). Subsequent to the release of that Television Ownership Further Notice, Congress directed the Commission to conduct a rulemaking proceeding to determine whether to retain, modify or eliminate existing limitations on the number of television stations that an entity may control within the same television market. See Section 202(c) of Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (Feb. 8, 1996) (Telecomm Act). In response to this Congressional directive in the Telecomm Act and to update the record, the Commission recently released another further notice of proposed rulemaking. See Review of the Commission's Regulations Governing Television Broadcasting, Second Further Notice of Proposed Rule Making, FCC 96-438 (released Nov. 7, 1996) (Television Ownership Second Further Notice). Because our rules are in flux, we do not believe that an unconditional grant of Tribune's permanent duopoly waiver requests is appropriate. We conclude, however, that temporary conditional duopoly waivers are warranted. 19. The Commission stated in the Television Ownership Second Further Notice that it will, during the pendency of the television ownership proceeding, generally grant duopoly waivers involving stations in different DMAs with no overlapping Grade A signal contours, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. Id. at  57. We noted our tentative conclusion in the Television Ownership Second Further Noticethat the record in that proceeding "supports relaxation of the geographic scope of the duopoly rule from its current Grade B overlap standard to a standard based on DMAs supplemented with a Grade A overlap criterion." Id. We further stated that "we do not believe granting waivers satisfying the proposed standard, and conditioning them on the outcome of this proceeding, will adversely affect our competition and diversity goals in the interim." Id. Tribune's common ownership of WTIC-TV, Hartford, WPIX(TV), New York and WLVI-TV, Cambridge would be authorized under the rule proposed in the Television Ownership Second Further Notice, as the three stations are in separate DMAs and their Grade A contours do not overlap. Moreover, our examination of the record presented here, including Tribune's showings as summarized at  8-13 above, reveals nothing suggesting that we should not follow the established interim policy in this case, and indeed indicates that grant of waivers conditioned on the outcome of the television ownership rulemaking proceeding will not harm competition and diversity in the relevant markets. Accordingly, we conclude that grant of temporary conditional duopoly waivers to permit Tribune's common ownership of WTIC- TV, WPIX(TV) and WLVI-TV, subject to the outcome of the television ownership proceeding, would serve the public interest, convenience and necessity. York/Philadelphia 20. WPMT(TV)'s Pending Modification Application. Before addressing Tribune's request for a permanent waiver of the duopoly rule to permit common ownership of WPMT(TV), York, and WPHL-TV, Philadelphia, Pennsylvania, we must first review the pending application filed by Renaissance subsidiary Channel 43 Licensee, Inc. to modify the facilities of WPMT(TV). This application proposes to modify WPMT(TV)'s facilities to increase the effective radiated power from 2,104 kW to 5,010 kW, and to deploy a directional antenna. Operating as proposed, WPMT(TV) will provide a new Grade B service to approximately 683,000 additional viewers, 32,000 of whom would receive their first Fox network service. While approximately 379,000 persons would lose the WPMT(TV) signal and Fox network service on WPMT(TV), all such persons would continue to receive Fox service from one of two other stations, and would continue to receive Grade B or better service from at least 11 other stations (with some receiving Grade B or better service from as many as 20 stations). The proposed modification also reduces the size of the Grade B overlap, and eliminates a small Grade A overlap, between WPHL-TV and WPMT(TV)'s currently authorized facilities. 21. The Commission has previously stated its concern about proposed modifications designed solely to avoid overlap problems under the multiple ownership rules. This concern is heightened when a modification would result in less than maximum use of the facilities (Jones T. Sudbury, 4 RR 2d 679, 680 (1965)), or where the population presently served would lose service if a modification of facilities were to be granted. Huron Shores Broadcasting Corp., 53 FCC 2d 216, 217 (1975). 22. The proposed modification in this case will significantly increase WPMT(TV)'s coverage and will provide new Grade B service to approximately 683,000 additional viewers. Moreover, all persons losing service from WPMT(TV) will continue to receive Fox service from one of two other stations, while 32,000 viewers will receive their first Fox network service as a result of the modification. This provision of a new network service to additional viewers, without the loss of such service to existing viewers, constitutes a significant public interest benefit. We conclude on balance that grant of WPMT(TV)'s minor change application serves the public interest, convenience and necessity, and will, therefore, grant the application. 23. Tribune's Waiver Request. WPMT(TV), Channel 43 (Fox), York, is located in the Harrisburg-Lancaster-Lebanon-York DMA (Harrisburg DMA), the 44th largest in the country, while WPHL-TV is located in the Philadelphia DMA, the fourth largest. Tribune has requested a permanent waiver of the duopoly rule to allow common ownership of the stations, asserting that an evaluation of its waiver request under the various factors previously identified by the Commission support its grant. 24. According to Tribune's engineering study, the predicted Grade B overlap between WPMT(TV) and WPHL-TV, following grant of the WPMT(TV) modification application, encompasses 2,201 square kilometers, representing 9.4% and 11.6% of the land area within the WPMT(TV) and WPHL-TV Grade B contours, respectively, and 348,000 persons, representing 9.1% and 5.0% of the population within the Grade B contours of WPMT(TV) and WPHL-TV, respectively. Tribune asserts that the Commission has approved permanent waivers of the duopoly rule in cases where the Grade B contour overlap was greater than the overlap at issue here. 25. With regard to the number of other media voices serving York and Philadelphia generally and the overlap area in particular, Tribune identifies 19 full-power television stations licensed to the Philadelphia DMA and six stations licensed to the Harrisburg DMA. According to Tribune, 29 full-service television stations other than WPMT(TV) and WPHL-TV serve some portion of the overlap area with a Grade B or better signal, with eight stations providing service to 100% of the overlap area. In addition, no portion of the overlap area receives fewer than 12 Grade B signals. Tribune contends that this number of broadcast television stations serving at least a portion of the overlap area is comparable to other cases in which the Commission has approved permanent duopoly waivers. Tribune also notes the high level of cable penetration in the Philadelphia and Harrisburg DMAs and in the WPMT/WPHL overlap area, the considerable number of radio stations licensed in these markets, and the existence of several daily newspapers with significant circulations serving the area. 26. Tribune additionally contends that WPMT(TV) and WPHL-TV serve separate and distinct markets. The Philadelphia DMA has, according to Tribune, nearly 2.7 million television households, approximately 16% of which are African-American and 4% Hispanic. The Philadelphia market has a significant urban ethnic population and a substantial, affluent suburban population, with a very limited rural population. In contrast, the Harrisburg DMA has approximately 579,000 television households, approximately 4% of which are African-American and 2% Hispanic. The Harrisburg market is the site of the Pennsylvania state capital and includes large rural farming areas and blue collar communities. 27. Moreover, Tribune asserts that common ownership of WPMT(TV) and WPHL-TV will not result in an anticompetitive concentration of economic power and will not threaten diversity in the Philadelphia or Harrisburg markets generally or in the WPMT/WPHL overlap area. WPMT(TV), a Fox affiliate, and WPHL-TV, a Warner Brothers affiliate, are both UHF stations. According to recent Nielsen studies, neither station is dominant in its market, with WPMT(TV) and WPHL-TV ranking fourth and fifth, respectively, in the Harrisburg and Philadelphia DMAs, and with both stations receiving reported viewing in only two of the five counties in the overlap area. Tribune also states that WPMT(TV) and WPHL-TV will each have its own general manager and will be run autonomously, with separate local news and programming decisions. 28. Finally, Tribune identifies several public interest factors to support its requested waiver. Tribune pledges to expend approximately $150,000 to establish a news bureau in Harrisburg, the state capital, which will provide stories to both WPMT(TV) and WPHL(TV). Tribune also states that it will improve the national news coverage on WPMT(TV) by investing in the equipment necessary to permit WPMT(TV) to both send and receive news feeds to and from Tribune's various other news resources, such as its Washington, D.C. Media Center and television news departments in other major cities. As the licensee of WPMT(TV), Tribune will additionally produce, in conjunction with a local health center, a series of "To Your Health" vignettes designed for children, and a local weather and education program for high school students, featuring the station's local weather anchor. Furthermore, Tribune is committed to completing, at an approximate cost of $1.0 to $1.3 million, the modification of the facilities authorized by the construction permit granted herein to Channel 43 Licensee, Inc., the current licensee of WPMT(TV). 29. Discussion. As discussed in detail at  18 above, the Commission is currently reexamining its broadcast television ownership policies, including the duopoly rule. Under these circumstances, we do not believe that an unconditional grant of Tribune's permanent duopoly waiver request is appropriate. We conclude, however, that a temporary conditional duopoly waiver is appropriate. 30. The Commission stated in the Television Ownership Second Further Notice that it will, during the pendency of the television ownership proceeding, generally grant duopoly waivers involving stations in different DMAs with no overlapping Grade A signal contours, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. Id. at  57. We noted our tentative conclusion in the Television Ownership Second Further Noticethat the record in that proceeding "supports relaxation of the geographic scope of the duopoly rule from its current Grade B overlap standard to a standard based on DMAs supplemented with a Grade A overlap criterion." Id. We further stated that "we do not believe granting waivers satisfying the proposed standard, and conditioning them on the outcome of this proceeding, will adversely affect our competition and diversity goals in the interim." Id. Common ownership of WPMT(TV), York and WPHL-TV, Philadelphia by Tribune would be authorized under the rule proposed in the Television Ownership Second Further Notice because the stations are in separate DMAs, and, following the grant of WPMT(TV)'s pending minor change application in this order, their Grade A contours would not overlap. Moreover, our examination of the record presented here, including Tribune's showings as summarized at  24-28 above, reveals nothing suggesting that we should not follow the established interim policy in this case, and indeed indicates that grant of a waiver conditioned on the outcome of the television ownership rulemaking proceeding will not harm competition and diversity in the relevant markets. Accordingly, we conclude that grant of a temporary conditional duopoly waiver to permit Tribune's common ownership of WPMT(TV) and WPHL-TV, subject to the outcome of the television ownership proceeding, would serve the public interest, convenience and necessity. Daily Newspaper Cross-Ownership Rule Waiver 31. In Fort Lauderdale, Broward County, Florida, Tribune currently owns the Sun-Sentineldaily newspaper. Our multiple ownership rules prohibit the grant of a license for a television station to any party if such party owns a daily newspaper and the grant of the license will result in the Grade A contour of the station encompassing the entire community in which such newspaper is published. 47 C.F.R. 73.3555(d)(3); Multiple Ownership of Standard, FM, and Television Broadcast Stations, Second Report and Order, 50 FCC 2d 1046 (1975) (Second Report and Order), recon., 53 FCC 2d 589 (1975) (Second Report and Order Recon.), aff'd sub nom. FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775 (1978). Because the predicted Grade A contour of Renaissance station WDZL(TV), Channel 39 (WB), Miami, which is located in Dade County, entirely encompasses Fort Lauderdale, the community in which the Sun-Sentinel is published, Tribune seeks a permanent waiver of the Commission's daily newspaper broadcast cross-ownership rule to allow the common ownership of these co-located media. 32. In the Order adopting the daily newspaper cross-ownership rule, the Commission noted that the term public interest in Section 309(a) of the Communications Act encompasses many factors, including "the widest possible dissemination of information from diverse and antagonistic sources." Second Report and Order, 50 FCC 2d at 1048 (1975) (quoting Associated Press v. United States, 326 U.S. 1, 20 (1945)). Although the Commission required immediate divestiture only in instances where it deemed the newspaper/broadcast combinations "egregious," the rule prohibited both the creation of new newspaper/broadcast combinations in the same area and the perpetuation of existing combinations through assignments or transfers to a single party. Id. at 1076; Crosby N. Boyd, et al., 54 FCC 2d 669, 672 (1975). We adopted this approach because we believed that any new licensing should be expected to add to local diversity. Second Report and Order, 50 FCC 2d at 1075. 33. The cross-ownership rule adopted in the Second Report and Order faced judicial scrutiny, with the Supreme Court ultimately upholding the rule. The Court expressly approved the Commission's diversity rationale, stating that the Commission was "entitled to rely on its judgment, based on experience, that 'it is unrealistic to expect true diversity from a commonly owned station- newspaper combination. The divergency of their viewpoints cannot be expected to be the same as if they were antagonistically run.'" FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775, 797 (1978) (quoting Second Report and Order, 50 FCC 2d at 1079-80). The Supreme Court also noted that the cross-ownership rule "offered the possibility of increasing diversity without causing any disruption of existing service," and held that "[i]n light of these considerations, the Commission clearly did not take an irrational view of the public interest when it decided to impose a prospective ban on new licensing of co-located newspaper-broadcast combinations." Id. 34. Despite our goal of increasing diversity by prohibiting the creation of new newspaper/broadcast combinations, we nonetheless specified in the Second Report and Order four instances in which we would consider permanent and temporary waivers of the cross-ownership rule: (1) where there is an inability to dispose of an interest in order to conform to the rules; (2) where the only sale possible is at an artificially depressed price; (3) where separate ownership and operation of the newspaper and station cannot be supported in the locality; and (4) where, for whatever reason, the purposes of the rule would be disserved by divestiture. Second Report and Order, 50 FCC 2d at 1085. Under the fourth or "catch-all" waiver category, we stated that we would examine any "special circumstances" advanced by the party as having a bearing on the appropriateness of granting a waiver. Id. at 1085 n. 47. We also, however, expressly indicated that parties should not seek a waiver premised on views rejected at the time we adopted the cross-ownership rule, as we did "not intend to relitigate resolved issues." Id. at 1085. The Commission has emphasized in subsequent decisions its intention not to "relitigate in waiver cases issues that were settled by the Second Report and Order." Hopkins Hall Broadcasting, Inc., 10 FCC Rcd 9764, 9766 (1995). See also Fox Television Stations Inc., 8 FCC Rcd 5341, 5348 (1993), aff'd sub nom. Metropolitan Council of NAACP Branches v. FCC, 46 F.3d 1154 (D.C. Cir. 1995). Although the Commission established these grounds for waiver in the context of the cross-ownership rule's divestiture requirement, we later deemed them equally applicable to new newspaper/broadcast ownership patterns, such as the combination Tribune seeks to create. See Capital Cities/ABC, Inc., 11 FCC Rcd at 5887 n. 52; Fox Television Stations Inc., 8 FCC Rcd at 5348 n. 19. 35. Tribune's Waiver Request. Tribune argues that, under the fourth or "catch-all" waiver category, the purposes of the cross-ownership rule would be disserved by its strict enforcement in this case. Based upon its definitions of the appropriate geographic and advertising product markets, Tribune alleges that the media market at issue is extremely competitive and will not be adversely affected by the proposed common ownership of WDZL(TV) and the Sun-Sentinel. Rather than focusing its argument on Broward County, the Sun-Sentinel's county of publication, Tribune defines the relevant geographic market as including Dade, Broward and Palm Beach counties, which Tribune refers to as the "South Florida market." Tribune contends that these counties constitute the common areas served by WDZL(TV) and the Sun-Sentinel, as WDZL(TV)'s Grade A contour includes portions of each of the three counties, and the Sun-Sentinel and associated Tribune publications are distributed in each of the counties. The practices of sellers of advertising, including WDZL(TV) and the Sun-Sentinel, and of buyers of advertising in Dade, Broward and Palm Beach counties are also among the factors cited in the Blair Report as supporting this definition of the geographic market. With regard to the definition of the relevant advertising product market, Tribune asserts that television stations, radio stations, cable television systems, daily newspapers, weekly newspapers, magazines, yellow pages, direct mail and billboards should all be considered. 36. According to Tribune, the South Florida market has a plethora of media outlets, including 23 separately owned television stations, 69 radio stations (49 of which are separately owned), six separately owned daily newspapers, and at least 15 weekly community newspapers. Cable penetration in Dade, Broward and Palm Beach counties is 60%, 79% and 78%, respectively, and multiple cable television companies serve all three counties. More than 2% of all households in the South Florida market also subscribe to a direct broadcast satellite service. Tribune states that WDZL(TV) is the seventh rated station in the Miami-Fort Lauderdale DMA and that the Miami Herald, not the Sun-Sentinel, is the dominant newspaper in the South Florida market. In that market, the Sun-Sentinel has a total daily circulation of 265,818 (2,150 in Dade, 199,466 in Broward and 64,202 in Palm Beach counties), while the total daily circulation of the Miami Herald is 359,103 (248,730 in Dade, 98,277 in Broward and 12,096 in Palm Beach counties). 37. The competitiveness of the South Florida market is also demonstrated, Tribune asserts, by an analysis of the advertising revenue in that market. In 1995, according to Tribune, out of a total of over $2 billion spent on advertising in the South Florida market, only 1.642% of those dollars were spent with WDZL(TV) and 12.336% of those dollars were spent on Sun-Sentinel publications. The Herfindahl-Hirschman Index (HHI) for all relevant advertising dollars in the South Florida market is 841 and will only rise to 881 following Tribune's purchase of Renaissance. If the more limited advertising product market consisting of broadcast stations, cable systems and newspapers and the more limited geographic market defined by Dade and Broward counties were analyzed, then WDZL(TV) earned 3.199% of 1995 advertising revenues and Sun-Sentinel publications earned 16.635% of the advertising revenues. Considering these more limited advertising product and geographic markets, the HHI is 1098 and will rise to 1205 following Tribune's acquisition of Renaissance. Tribune also notes that in 1994 the Miami ADI had the second lowest HHI for audience share in the top 50 local broadcast markets, based on average prime time ratings, and the lowest HHI for audience share in the top 50 markets, based on average all daypart ratings. See Review of the Prime Time Access Rule, Report and Order, 11 FCC Rcd 546, 615 (1995) (Prime Time Access Rule Review). Tribune asserts that these figures demonstrate the lack of concentration in the South Florida market and show that common ownership of WDZL(TV) and the Sun-Sentinel will not adversely affect the competitiveness of the market. 38. Tribune also identifies several benefits that would result from its common ownership of the Sun-Sentinel and WDZL(TV). Under Tribune's ownership, WDZL(TV)'s 10:00 p.m. local news broadcast would be enhanced by access to Tribune's Washington, D.C. Media Center and by the resources of the Sun-Sentinel. Tribune would utilize the resources of the Sun-Sentinel and its associated Hispanic weekly publication Exito to broadcast monthly on WDZL(TV) new public affairs programs addressing issues of importance to the local Hispanic community. In addition, Tribune would draw upon particular resources of the Sun-Sentinel to develop children-oriented programming, including: (1) a weekly video version of "Next Generation" for broadcast in its new newscasts; (2) a series of one-minute viewpoint segments to be broadcast during children's programming; (3) a 30-minute news magazine for children ages 12 to 16 on "hard" news issues; (4) improved programming on parenting and children; and (5) public service campaigns concerning important local issues and public safety, emphasizing child safety. While these various benefits will arise from common ownership of the Sun-Sentinel and WDZL(TV), Tribune states that the newspaper and the station will continue to be managed and operated separately, with separate editorial control. Because these benefits will enhance programming diversity in, and will be provided without decreasing the competitiveness of, the South Florida market, Tribune asserts that its requested waiver of the cross-ownership rule is warranted under the Commission's existing standards. 39. Finally, Tribune asserts that any denial of a permanent waiver and strict application of the cross-ownership rule would be inconsistent with the Commission's obligations under Bechtel v. FCC, 10 F.3d 875 (D.C. Cir. 1993), to ensure that its actions are compatible with the realities of today's marketplace, and would as well be contrary to the First Amendment. According to Tribune, the constitutionality of the newspaper cross-ownership rule depends on continued scarcity and lack of diversity in the video programming market. Tribune argues that there is no longer scarcity in either the national or in the South Florida markets for video programming, due to the increases in the number of modes of delivery of video programming and in the amount of local programming that viewers typically receive. In light of the weakened scarcity rationale, Tribune asserts that the cross- ownership rule would be subject to heightened First Amendment scrutiny, which it would not survive because the rule is not narrowly tailored to further an important or substantial governmental interest unrelated to the suppression of free speech. 40. Knight-Ridder's Petition to Deny. Knight-Ridder, owner of the Miami Herald, opposes the application to transfer WDZL(TV) in so far as the application seeks a permanent waiver (or a waiver of indefinite duration pending a rulemaking) to permit Tribune to own both WDZL(TV) and the Sun-Sentinel. Knight-Ridder argues that Tribune's request does not meet, for two primary reasons, the rigorous standards for permanent waiver of the newspaper cross-ownership rule. First, the benefits identified by Tribune resulting from common ownership of WDZL(TV) and the Sun- Sentinel are of the type that the Commission has stated in previous cases it will not consider in justifying waiver of the cross-ownership rule. Second, Tribune has failed to meet the Commission's standards for demonstrating that the proposed waiver would not have anti-competitive effects because Tribune inappropriately focused its economic analysis on a multi-county area, rather than on the city or county in which the Sun-Sentinel is published. Knight-Ridder additionally asserts that any changes to the cross-ownership rule should be effected through a formal rulemaking proceeding, particularly as the arguments presented by Tribune challenge the general economic and constitutional merits of the rule. According to Knight-Ridder, amending the cross-ownership rule in a piecemeal manner by granting individual waiver requests, as Tribune urges, would have several undesirable consequences. For these reasons, Knight-Ridder asks the Commission to deny Tribune's request for a permanent waiver or for a waiver of indefinite duration until the completion of a rulemaking on the cross-ownership rule. Instead, Knight-Ridder urges the Commission to grant no more than a six-month waiver of the rule, with an additional requirement that the management and operations of the Sun-Sentinel and WDZL(TV) be kept independent of each other. 41. In opposing Knight-Ridder's petition, Tribune asserts that it has made a market-specific showing that warrants the requested waiver under current Commission precedent. In particular, Tribune states that it has properly defined the appropriate geographic market to include, at a minimum, Broward and Dade counties, and has presented specific facts pertaining to the competitiveness and lack of concentration in the South Florida market that justify a waiver in this case. In addition, Tribune acknowledges that its waiver showing demonstrates the need for a comprehensive review of the cross-ownership rule. It contends, however, that such need -- or even the Commission's intent to conduct a rulemaking -- cannot serve as the basis for refusing to evaluate Tribune's waiver request under the market conditions that exist today, rather than the conditions that existed when the Commission adopted the cross-ownership rule. 42. In response, Knight-Ridder reiterates that Tribune's waiver request is predicated upon an analysis of the incorrect geographic market. Given the very limited circulation of the Sun- Sentinel in Dade County, Knight-Ridder asserts that the market analysis in this case should be limited to Broward County, where the Sun-Sentinel is published. Knight-Ridder also emphasizes that Tribune's request for a permanent waiver unsupported by Commission precedent merely underscores the need for the Commission to review the cross-ownership rule in an open rulemaking proceeding. 43. Discussion. Since the enumeration of the newspaper cross-ownership rule's waiver requirements in the Second Report and Order, Commission precedent has established that a permanent waiver of the rule entails a "considerably heavier" burden of justification than a temporary waiver, and that such a waiver would not be granted absent "highly unusual facts," News America Publishing, Inc., 844 F.2d at 803, or "exceptional" or "extraordinary" circumstances. Metropolitan Council of NAACP Branches v. FCC, 46 F.3d 1154, 1163 (D.C. Cir. 1995). 44. The Commission has granted permanent waivers of the cross-ownership rule only twice in the past twenty years. On both occasions, the Commission waived the rule under the fourth or "catch-all" waiver category, the same category under which Tribune now requests a waiver. In 1977, based on the "special circumstances" identified by the parties, we permanently waived the rule to allow the publisher of two daily newspapers in Chicago to reacquire control of UHF station WFLD- TV, Chicago, noting that reacquisition of the station did not constitute a new ownership pattern. We also stated that the station at issue had only recently become financially viable, and that the sale occurred as a result of the "complete liquidation" of the assignor. Field Communications Corporation, 65 FCC 2d 959, 961 (1977). Similarly, in 1993, we granted a permanent waiver of the rule to allow the owner of WNYW-TV, New York, to continue to control that station after reacquiring the New York Post. We concluded that reacquisition of the New York Post by its previous owner might be pivotal to the newspaper's survival and that affording a waiver to accommodate the policies underlying the federal bankruptcy laws would be consistent with the Commission's own policies. Accordingly, we granted a permanent waiver to preserve a media voice. Fox Television Stations Inc., 8 FCC Rcd at 5350. 45. The instant case concerns a request for a permanent waiver to allow the creation of a new newspaper/television combination, thereby resulting in the reduction of the number of separate media voices. As such, Tribune bears a particularly heavy burden to justify its waiver request. In this case, Tribune cannot present arguments (such as financial distress of the media property being acquired) similar to those present in Fox and Field. Thus, we must determine whether Tribune's showings concerning the competitiveness of the South Florida market, and the benefits resulting from common ownership of the Sun-Sentinel and WDZL(TV), demonstrate "exceptional" or "extraordinary" circumstances that would justify a waiver. Metropolitan Council of NAACP Branches, 46 F.3d at 1163. For the reasons detailed below, we conclude that Tribune has not met this burden. 46. Even initially assuming that Tribune's showings as to the diversity, competitiveness and lack of concentration in the South Florida market are based on the appropriate geographic market, we find that Tribune's showing does not rise to the level of "exceptional" or "extraordinary." We have previously indicated that the existence of even a considerable number of media voices in a market is not sufficient, without additional "special circumstances," to justify a waiver of the cross- ownership rule. In Fox Television Stations Inc., 8 FCC Rcd at 5349, we analyzed the request for a permanent waiver under "the fourth category's 'special circumstances' standard, in tandem with an evaluation of the diversity and competitiveness of the New York City market." While we concluded that a permanent waiver was warranted under the "special circumstances" presented, we emphasized that the waiver was not based simply on the diversity and competitiveness of the New York market, but on the precarious financial condition of the New York Post and the Commission's responsibility to accommodate federal bankruptcy policies. Id. at 5350 n. 31. Similarly, Tribune's historical analysis of the South Florida market, noting an increase in the number of television and radio stations serving the market since 1975, does not demonstrate the special circumstances necessary for a waiver under the fourth category. In Fox Television Stations Inc., one commenter argued that the Commission should compare the number of television stations and newspapers available in New York City in 1975 with those currently available. The Commission concluded that a "comparison of the New York media market in 1975 with that of today" was not controlling in an analysis under the fourth waiver category. Instead, the Commission would rely upon the composition of the relevant market and how diversity might be affected by the merger proposal at issue, "in conjunction with the 'special circumstances'" present in the case. Id. at 5351 n. 36. 47. Moreover, despite the existence of a number of competing media voices in the South Florida market, our primary concern -- ensuring a "diversity of viewpoints from antagonistic sources" -- remains. Second Report and Order, 50 FCC 2d at 1079. Indeed, the Commission has long been particularly concerned with the possible threats to diversity posed by newspaper/television combinations. See Newspaper/Radio Cross-Ownership Waiver Policy, Notice of Inquiry, FCC 96- 381 at  11 (released Oct. 1, 1996) (Notice of Inquiry). We must therefore consider whether the public benefits identified by Tribune as arising from common ownership of the Sun-Sentinel and WDZL(TV) override the concerns that lead to the adoption of our newspaper broadcast cross- ownership rule. 48. Tribune's analysis of economic concentration in the South Florida media market does not appear to present exceptional circumstances. Considering a geographic market consisting of Dade and Broward counties and an advertising product market limited to broadcast stations, newspapers and cable television systems, Tribune calculated the HHI to be 1098, rising to 1205 following the proposed acquisition of WDZL(TV). See supra  37. An HHI above 1000 is regarded as moderately concentrated. In addition, even though the Miami ADI had the second lowest HHI for prime time audience share in the top 50 markets in 1994, that HHI was nonetheless in the moderately concentrated range (1060). See Prime Time Access Rule Review, 11 FCC Rcd at 615. These HHI figures do not appear to demonstrate the "exceptional" or "extraordinary" circumstances required to justify a permanent waiver permitting a new newspaper/television combination. In this regard we note that the Detroit market at issue in Capital Cities/ABC, Inc., 11 FCC Rcd at 5892, would have had an HHI of only 1150 had we allowed continued common ownership of the media properties concerned. We see no reason to decide the instant case differently than Capital Cities/ABC, Inc., where we declined to grant a permanent waiver to allow the transfer of already-existing newspaper/radio combinations. See 11 FCC Rcd at 5883, 5895. 49. Furthermore, we believe the benefits cited by Tribune as resulting from common ownership of the Sun-Sentinel and WDZL(TV), including enhanced local news, children's and Hispanic-oriented programming, do not constitute the "exceptional" or "extraordinary" circumstances necessary to warrant grant of a permanent cross-ownership rule waiver. As clearly stated in the Order adopting the cross-ownership rule, 50 FCC 2d at 1085, and reaffirmed in recent decisions, the Commission will not relitigate in waiver cases issues settled by the Second Report and Order. See Capital Cities/ABC, Inc., 11 FCC Rcd at 5894; Hopkins Hall Broadcasting, Inc., 10 FCC Rcd at 9766. Because, as Knight-Ridder states in its petition, the Commission considered and rejected arguments concerning, inter alia, minority programming and more effective dissemination of news and public information, as justifications for waiver in the Second Report and Order, 50 FCC 2d at 1064, we are not inclined to find the public interest benefits identified by Tribune sufficient to warrant a permanent waiver. Moreover, certain of the benefits identified by Tribune, such as enhanced news gathering and public service campaigns, appear to be of the type that would exist in virtually all newspaper/broadcast combinations and, consequently, cannot be regarded as demonstrating exceptional circumstances. In view of the above, we conclude that Tribune has not met its heavy burden of justifying a permanent waiver of the newspaper/television cross-ownership rule. 50. As Knight-Ridder points out, many of Tribune's arguments challenging the general economic and constitutional merits of the newspaper cross-ownership rule have broad applicability, and suggest changes in the Commission's basic newspaper/television cross-ownership waiver policies, or amendment to the underlying rule itself. We believe it is inappropriate to address such arguments "in a restricted adjudicatory proceeding in which third parties, including those with substantial stakes in the outcome, have had no opportunity to participate, and in which we, as a result, have not had the benefit of a full and well-counseled record." Capital Cities/ABC, Inc., 11 FCC Rcd at 5888. To the extent that Tribune's waiver request presents arguments for a broad clarification or expansion in the definitions of the geographic market and the advertising product market to be applied in newspaper cross-ownership cases, we believe that an open proceeding, rather than a restricted adjudication, is the better forum to address such issues. See Capital Cities/ABC, Inc., 11 FCC Rcd at 5891 (stating that open proceeding is proper forum to reexamine geographic market definition). As the Supreme Court has stated, "rulemaking is generally a better, fairer, and more effective method of implementing a new industrywide policy than is the uneven application of conditions in isolated [adjudicatory] proceedings." Community Television of Southern California v. Gottfried, 459 U.S. 498, 511 (1983). Similarly, initiating a rulemaking or other open proceeding would be a "better, fairer, and more effective method" of implementing a modified newspaper cross- ownership rule or waiver policies than would the "uneven" granting of individual waivers, such as the permanent one requested by Tribune. A decision to proceed with any modification of the newspaper cross-ownership rule, or our waiver policies thereunder, by means of an open proceeding is well within the Commission's discretion. 51. Although a general reexamination of the economic and constitutional merits of the newspaper cross-ownership rule should be done in an open proceeding, we must consider here Tribune's contention that the existing cross-ownership rule is unconstitutional as applied to Tribune. We believe our decision declining to allow Tribune to create a new newspaper/television combination serves the public interest by promoting viewpoint diversity. See supra  32-33; 47. As the Supreme Court stated when unanimously upholding the constitutionality of the newspaper/television cross-ownership rule, the Commission's public interest standard invites particular reference "to the First Amendment goal of achieving `the widest possible dissemination of information from diverse and antagonistic sources.'" FCC v. National Citizens Comm. for Broadcasting, 436 U.S. at 795 (quoting Associated Press v. United States, 326 U.S. 1, 20 (1945)). Furthermore, nothing in the subsequent decisions of the courts or the actions of Congress suggest that the continued application of this rule in pursuit of the Commission's long-standing interest in diversity and competition in media markets would impose an unconstitutional burden on Tribune in the circumstances of this case. We note, for example, that until recently, Congress has repeatedly imposed specific appropriations restrictions on the Commission intended to ensure the continued application of the existing rule to newspaper/television combinations. And, in addressing and significantly amending substantial portions of the Commission's ownership rules in the Telecommunications Act of 1996, Congress considered but rejected any changes in the newspaper/broadcast cross-ownership rule. See Notice of Inquiry, FCC 96-381 at  7. For these reasons, we conclude that application of the newspaper cross-ownership rule to Tribune, notwithstanding changes in media market circumstances since the adoption of the rule, is not unconstitutional. 52. Finally, we do not believe that the Bechtel decision relied upon by Tribune is applicable to the present case. In Bechtel v. FCC, 957 F.2d 873, 881 (D.C. Cir.), cert. denied, 506 U.S. 816 (1992) (Bechtel I), the court directed the Commission to respond to challenges to its "integration" policy raised in a broadcast license application, stating that the Commission must "be prepared to explain and justify general policies not embodied in a regulation where they are properly challenged in a specific case." Subsequently, in Bechtel v. FCC, 10 F.3d 875, 878 (D.C. Cir. 1993) (Bechtel II), the court examined in detail the Commission's integration policy, found that policy to be arbitrary and capricious, and ordered the Commission to consider the station application at issue under standards free of the policy. In addition, the court stated that the pendency of a rulemaking to reconsider the integration policy did not authorize the Commission to continue applying that policy, which had been found to be arbitrary and capricious. Id. at 887. 53. As described, the Bechtel I and Bechtel II decisions do not support Tribune's assertions with regard to the Commission's obligations in reviewing the cross-ownership waiver request. The integration policy at issue in the Bechtel cases was set forth in a policy statement, which, because it was adopted without notice and comment procedures, was "subject to complete attack" before being applied in a particular case. Bechtel II, 10 F.3d at 878. In contrast, the Commission adopted the newspaper/broadcast cross-ownership rule following a full notice and comment rulemaking. Furthermore, in Bechtel I, the court had specifically directed the Commission to examine its integration policy, and, in Bechtel II, the court, following a detailed review of the integration policy, found that policy to be arbitrary and capricious. Under the analysis of the Bechtel decisions, the Commission clearly could not continue to apply to particular cases the newspaper cross-ownership rule during the pendency of a rulemaking reexamining the rule, if a court were to find the rule arbitrary and capricious. No court, however, has made such a determination, or even directed the Commission to review the cross-ownership rule. To the contrary, the Supreme Court has unanimously upheld the cross-ownership rule. Consequently, the Bechtel cases cannot be interpreted as prohibiting the Commission from applying the cross-ownership rule to Tribune's waiver request, and deferring consideration of Tribune's challenges to the economic and constitutional validity of the rule until an open rulemaking. 54. Cincinnati Bell Telephone Co. v. FCC, 69 F.3d 752 (6th Cir. 1995), also cited by Tribune, is similarly inapplicable. In that case, the Commission proposed in a notice of proposed rulemaking to treat cellular and personal communications service (PCS) systems alike by allowing all local exchange carriers to offer PCS without a structural separation requirement and by eliminating such requirement for providing cellular service previously imposed on the local exchange carriers. In the final order, however, the Commission determined not to impose a structural separation requirement on Bell Operating Companies' (BOC) PCS operations, but found the record insufficient to warrant elimination of the structural separation requirement for BOC cellular operations. The court reversed on the ground that the Commission failed to give a reasoned explanation as to why structural separation was required in the cellular context but not in the PCS context, particularly since the Commission's final order had found PCS and cellular to be similar in other respects. In contrast, in addressing the waiver request at issue, the Commission has given a reasoned explanation for denial of Tribune's permanent waiver request. Our determination not to reach Tribune's challenges to the constitutional and economic merits of the cross-ownership rule is also reasonable, given that the current proceeding is a restricted adjudicatory one, rather than a notice and comment rulemaking, as in Cincinnati Bell Telephone, where the underlying merits of a rule are properly considered. 55. For the reasons set forth above, we conclude that Tribune's request for a permanent waiver of the newspaper/broadcast cross-ownership rule to allow the creation of a new newspaper/television combination must be denied. We believe, however, that Tribune has, as summarized above, submitted sufficient showings concerning the diversity and competitiveness of the South Florida market to justify the grant of a temporary waiver. Accordingly, we grant Tribune a temporary 12-month waiver to allow an orderly divestiture of either WDZL(TV) or the Sun- Sentinel newspaper. PROCEDURAL ISSUES 56. Tribune also requests, if we deny the request for a permanent waiver of the newspaper cross-ownership rule and instead choose to grant Tribune a temporary waiver, that we do one of the following: (1) issue a separate order denying Tribune's request for a permanent waiver; (2) grant Tribune a waiver of Section 1.110 of our rules; or (3) delay the effective date of the denial of the permanent waiver until after the Commission completes a rulemaking concerning the newspaper cross-ownership rule. Tribune argues that grant of any of these three alternatives would permit the consummation of its acquisition of Renaissance without delay, while at the same time permitting the most efficient review of the Commission's action on Tribune's permanent newspaper cross- ownership waiver request. 57. In reviewing transactions in the broadcast industry, our consistent practice has been to address all issues relevant to any transaction in a single order with a single effective date. See, e.g., Stockholders of CBS Inc., 11 FCC Rcd 3733; Capital Cities/ABC, Inc., 11 FCC Rcd 5841. We see no reason to deviate from our standard practice here. Denial of Tribune's alternative requests will not delay the consummation of the merger with Renaissance. Moreover, with regard to Tribune's request for a waiver of Section 1.110, there are no circumstances warranting a waiver of that rule, unlike in the single case cited by Tribune in which we did waive the rule's requirements. Because we believe that addressing all issues relevant to the Tribune/Renaissance transaction in a consolidated order "will best conduce to the proper dispatch of business and to the ends of justice," 47 U.S.C.  154(j), we accordingly deny Tribune's request for a separate order, for a waiver of Section 1.110, or for a delay in the effective date of a part of our order. CONCLUSION 58. We have reviewed the proposed merger and the related pleadings and find the applicants to be qualified in all respects. We also find that grant of the transfer of control of the Renaissance television stations to Tribune will serve the public interest, convenience and necessity. 59. Accordingly, IT IS ORDERED, That the Petition to Deny filed by Counterpoint Communications, Inc. IS DENIED, and that the Petition to Deny filed by Knight-Ridder, Inc. IS GRANTED to the extent indicated herein, and DENIED in all other respects. 60. IT IS FURTHER ORDERED, That the applications for consent to the transfer of control of the Renaissance Communications Corporation broadcast television stations, BTCCT-960801LG through BTCCT-960801LL, ARE GRANTED. IT IS FURTHER ORDERED, That the application for modification of the facilities of WPMT(TV), BPCT-960724KK, IS GRANTED. 61. IT IS FURTHER ORDERED, That Tribune Company's requests for permanent waiver of the duopoly rule, Section 73.3555(b) of the Commission's rules, to permit common ownership of WTIC-TV, WPIX(TV), WLVI-TV, WPMT(TV) and WPHL-TV, ARE DENIED. 62. IT IS FURTHER ORDERED, That temporary conditional waivers of Section 73.3555(b) ARE GRANTED to permit Tribune Company's common ownership of WTIC-TV, WPIX(TV), WLVI-TV, WPMT(TV) and WPHL-TV, subject to the outcome of the Commission's pending broadcast television ownership rulemaking (MM Docket Nos. 91-221 and 87-8). Should divestiture be required as a result of that proceeding, the licensee is directed to file, within six months from the release of the final order in MM Docket Nos. 91-221 and 87-8, applications for Commission consent to dispose of such stations as would be necessary for the Tribune Company to come into compliance with the rules as provided in the final order. 63. IT IS FURTHER ORDERED, That Tribune Company's request for permanent waiver of the Commission's daily newspaper cross-ownership rule, Section 73.3555(d), to permit common ownership of the Fort Lauderdale, Florida Sun-Sentinel newspaper and WDZL(TV), Miami IS DENIED. 64. IT IS FURTHER ORDERED, That a temporary waiver of Section 73.3555(d) IS GRANTED to permit common ownership of the Sun-Sentinel newspaper and WDZL(TV) for a 12- month period in which Tribune Company would be required to come into compliance with our multiple ownership rules. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary Statement of Commissioner James H. Quello Concurring in Part and Dissenting in Part FCC 97-98 In re Applications of STOCKHOLDERS OF RENAISSANCE COMMUNICATIONS CORPORATION and TRIBUNE COMPANY Today's decision approves the transfer of control of Renaissance Communications Corporation to the Tribune Company. As a result of the merger, Tribune will own a total of 16 television stations and 5 radio stations, as well as a variety of newspapers. Although I concur with respect to the transfer of control, I respectfully dissent from the portion of the decision which denies Tribune's request for a permanent waiver of our newspaper- television cross ownership rule so that it could retain ownership of both the Sun-Sentinelnewspaper in Ft. Lauderdale and WDZL(TV)(Ch.39) in Miami, Florida. I would have preferred, instead, to grant Tribune a waiver, conditioned on the outcome of a review of our newspaper- television cross ownership rule and the waiver criteria it imposes. The majority's decision today relies on a newspaper-television ownership rule which, in my opinion, is out-dated, over-regulatory, and all too often flies in the face of common sense. I would use this case involving Renaissance and Tribune to evaluate the continuing viability of this rule in light of today's marketplace, and not that of 23 years ago. When the rule was written, newspapers held a much more dominant position in the overall market place and significantly fewer television stations were present nationwide. To the extent that the Commission is relying on the newspaper-television cross ownership rule, I believe that it should ensure that the rule reflects today's market dynamics. In this instance, because of the fundamental changes in the South Florida market (Dade, Broward, and Palm Beach counties) since the rule was passed, I believe that Tribune deserves an analysis based on the market demands and the competitive, de- regulatory framework of rules as they apply today. The market at issue in South Florida is one which is highly competitive with no fewer than 23 separately owned television stations, 69 radio stations (49 of which are separately owned), 6 separately owned daily newspapers, and at least 15 weekly community newspapers. WDZL(TV) is a UHF station, and although the Sun-Sentinel has a high circulation in Broward County, where it is published, it lags significantly behind the Miami Herald in the South Florida area. Even considering the various potential definitions in the record for the relevant market, the HHI index produces a result that is only either unconcentrated or moderately concentrated. Consequently, I believe that reliance on the other competitive factors in the market provides justification for a waiver. Moreover, Tribune insists that the management, operation, and editorial control of both entities would continue to be separate. The fact that the Commission has only granted two waivers of the cross ownership rule in the past twenty years should, in my mind, raise serious doubt as to the standards for not only the rule, but for the waivers. While we have regularly evaluated our other ownership rules in light of current market factors, we refuse to do so here. The majority rationalizes its limited review of the waiver showing on the grounds that we stated, when we adopted the rule, that parties should not seek a waiver premised on views rejected at the time that we adopted the cross ownership rules. The rule, however, was adopted in 1975, over 20 years ago. To assume that our views have not changed as the competitive marketplace has evolved is to put government regulation in an outdated time capsule. Fortunately, the Commission, in other contexts, has recognized that in considering waivers it need not follow the decision-making process used in previous waivers, nor must it follow the strict rationale used in developing the original rule. Citadel Communications Co., Ltd.. 8 FCC Rcd. 855, 858 (1993). I believe that this principle should guide our decision here. The majority further states that the mere existence of a significant number of media outlets in the South Florida market cannot be regarded as an "exceptional circumstance." However, the issues of diversity and competition are the very basis for the rule, and should, in my opinion, always be central to our reasoning for granting or denying a waiver request. I believe that this Commission needs to initiate a rulemaking concerning the cross ownership rule for newspaper and television owners. It seems to me that the rule, and any waivers thereto, should be clear cut and modeled after today's marketplace, not that of twenty years ago. If the market in which cross ownership occurs is viable and competitive, and there is no undue adverse effect on the market by the grant of the waiver, this Commission owes it to the entities involved to take a hard look at the serious repercussions of denying the waiver. If the public interest is served by the combination, there is no competitive harm as a result, and the overall market viability is not seriously effected, then we should not be restricting these combinations. FCC 97-98 CONCURRING STATEMENT OF COMMISSIONER RACHELLE B. CHONG Re: Applications of Stockholders of Renaissance Communications Corporation, et al., File Nos. BTCCT-960801LG, et al. In this case, the Commission was asked to approve the transfer of control of six television stations owned by Renaissance Communications Corp. to the Tribune Company. Because I fear that regulatory inaction will otherwise undermine this business transaction, I reluctantly concur in this decision. My concern is that two aspects of the decision are overly regulatory and may place unnecessary restrictions on Tribune. First, with regard to Tribune's request for a permanent waiver of our duopoly rule for stations WTIC-TV in Hartford, Connecticut, WPIX(TV) in New York and WLVI-TV in Cambridge, Massachusetts, our decision grants only a temporary conditional waiver subject to the outcome of our television ownership rulemaking. Although this temporary conditional grant is consistent with the interim policy we announced in the Second Further Notice in our television ownership rulemaking, I believe the Commission could have taken a less regulatory route. In my view, Tribune presented ample evidence in this record to justify a permanent waiver under our existing precedent. The Hartford, New York and Cambridge television markets are clearly distinct and diverse. We have previously recognized that such clear market distinctions warranted permanent waivers of the TV duopoly rule in New York and Philadelphia. See Capital Cities/ABC, Inc., 11 FCC Rcd 5841 (1996); Stockholders of CBS, Inc., 11 FCC Rcd 3733 (1995). We could have followed that precedent here. By doing so, we would have afforded certainty to Tribune and eliminated the need for a further regulatory step. I would have preferred that result. I also reluctantly concur in decision today to deny Tribune's request for a new permanent waiver of the newspaper cross-ownership rule. Tribune argued that it should be permitted to own station WDZL(TV) in Miami even though it owns the Sun-Sentinel daily newspaper, which serves much of the Miami area. Tribune argued that the rule serves no purpose in this media-rich market and that it places an unconstitutional burden on its right to free speech. I find merit in Tribune's argument. The Commission should be reexamining this rule to determine whether it makes sense in our current competitive media environment. For this reason, I would have preferred to initiate a rulemaking and grant a temporary waiver pending the outcome of that rulemaking rather than the 12 month waiver given in this decision. I believe the Commission should initiate such a rulemaking promptly.